The Case for $2,000 GoldWhy the Quiet Bull Market of the 21st Century is About to Roar!
By Craig R. Smith & David M. Bradshaw
Nov. 27, 2007

Moving little faster than a 19th century stagecoach, this "secular" (long-term) bull market in tangible assets has managed to escape the notice of mainstream America or media fanfare so far in the 21st century. That is about to change.

Now that gold prices have risen above $800/oz., a new public phase of the gold rush is set to begin. Strong physical demand, a falling dollar, central bank buying, geopolitical risks and concerns about inflation are only a few of the major forces driving this gold bull.

"The era of 'peak gold' has arrived. Try as they might, miners cannot find enough ore at viable costs to replace their fast-depleting reserves, even if they dig miles into the center of the earth," reports London Telegraph.

"Gold is not a mainstream investment yet, because it's seen as difficult to understand," financial gurus tell Reuters.

Yet every day it becomes easier for the man on the street to understand that his paper dollars are becoming worth less … and his food, health care, gas, oil, gold, silver and most other tangible assets are all costing him more.

"The relatively subdued interest of the investing public, if not the investment newsletters and columnists, is in fact good news for those long the metal. It means there are a lot of people left to buy the stuff, which is not the case at bull market peaks. So even at about $800 the ounce, the real gold bull market has not begun," reports London Financial Times.

Headlines report: "Gold at 28-year high", yet often fail to mention, that after discounting prices for inflation, gold must rise above $2,150/oz., nearly three times the current price, to reach the previous 1980 price peak.

Ambrose Evans-Pritchard, International Business Editor for The London Telegraph reports correctly; "In today's terms, $850 gold would be equivalent to $2,000 an ounce, suggesting that the current
six-year bull market in precious metals may have much
further to run."

"Global commodity companies believe that gold prices will rise for years to come, eventually reaching at least $2,000 and it will probably go even higher. Investment experts say gold is the best commodity to invest in because it has stood the test of time," reports Nandita Jain of Commodity Online.

So gold is now about one third of the way toward reaching a true new high. Using the official government CPI inflation adjuster, $800/oz. gold in 1980 equates to $316/oz. gold today in 1980 dollars. So rather than being near a market top, gold remains the buy of a generation.

Economists finally agree on gold's future

Gold prices have grown about $100/oz. per year since 2003. Gold was $300 in '03, $400 in '04, $500 in '05, $600 in '06 and now $800 in '07. Savvy investors and gold experts see $850+ gold in 2008!

"A financial crisis will likely send the U.S. dollar into a free fall of as much as 90 percent and gold soaring to $2,000 an ounce," said Gerald Celente, Trends Research Institute Director. "We are going to see economic times the likes of which no living person has seen, a panic of 2008," reports UPI.

Many analysts have jumped onto the $1,000+/oz. gold bandwagon since 2001; most of whom were not considered "gold bugs" in the past, like Citibank and JP Morgan & Co.

Forty-five prominent analysts, authors and gold experts already on the record forecasting four-digit gold prices to arrive in the years ahead. Their combined gold price expectation is $2,090/oz. gold!

Here are just five sample quotes from our 2007 "Future of Gold" financial journal. These professionals offer dozens of good reasons for owning gold today, which experts agree will drive gold prices sky high over the next 5-10 years.

"We would be very surprised if the gold price did not blast right through the old highs, and we reaffirm our old targets for gold of $3,000 to $5,000 an ounce (Plus silver over $100 an ounce) ... gold is not merely a colorful trinket but a monetary asset, and when mass fear strikes at the heart of paper money, the stampede to gold will be awesome." -JAMES DINES, Editor, The Dines Letter, MW, 11-5-07

"Gold will hit $850-$870 by the end of 2007 and $2,000 gold is achievable in this move, given the huge demand from ETFs and soon pensions and insurance companies will be buying gold as a new alternative asset class." ROB LUTTS, President, Cabot Money Management -CNBC, 11-2-07

"When FEAR combines with full blown Greed, there is no longer any more talk of correction as prices begin to jump 5% to 10% in one day and people line up to buy bullion as signs pop up everywhere, “WE buy and sell gold”. Once both fear and greed take over the market and the short squeezes begin in earnest, there is no way of predicting how high the high. $2,200 gold and $100 silver seems the barest minimum targets, maybe $5,000 or even $10,000." AUBIE BALTIN, CFA, CTA, CFP, PhD -FiendBear, 9-24-07

"Market ructions, the sub-prime conflagration and a collapse of the dollar could send gold prices to more than $3,400 an ounce within the next three years. This is not a sub-prime crisis. Sub-prime has merely exposed the bigger scam of structured finance; a scam that is about pretending that bad credit is good credit." CHRISTOPHER WOOD, Chief strategist, CLSA -London Times, 9-19-07

"I've written in this column about inflation often over the last three years. I've said gold was going to $1,000. If the Fed cuts rates, then I'm going to have to admit I was wrong. Then gold isn't going to $1,000. It's going to $2,000." DONALD LUSKIN, Chief investment officer, Trend Macrolytics -Smart Money, 9-7-07

It's time for a personal gold standard

Money is either the builder or destroyer of society. An honest money system brings prosperity to all citizens willing to work. A dishonest money system enriches a few at the expense of everyone else. Hidden monetary inflation often distorts financial headlines.

At www.swissamerica.com we help our readers debunk today's confusing financial world. Here are a few recent quotes from reliable sources confirming $800 gold is still a good buy:

"Gold is starting into the most exciting part of its long-term bull market, the so-called second (and monetary) phase. Herein we normally see the biggest percentage gains, matched by biggest corrections. My tentative targets (by end of 2008): $1,600 gold and $45 silver," HARRY SCHULTZ told Marketwatch.

"This 'stealth' gold bull market is the best of all worlds. We continue to move up in stages and go through some healthy corrections and long periods of sideways base-building," writes PETER GRANDICH of The Grandich Letter.

"If deciding to buy gold feels at all hard today, it might suggest the top of this market remains a long way off yet. As long as Bloomberg columnists argue that buying gold is like 'believing in the tooth fairy' …mainstream consensus is still opposed to gold," reports ADRIAN ASH for The Daily Reckoning.

"We believe this gold rally is still in its infancy with a 'toe in the water' ahead of the upcoming 4Q," according to Raymond James analyst PAUL O'BRIEN," reports the Financial Post.

Smart investors are diversifying out of dollars and into gold; a trend experts expect to continue for another 8-15 years. The real question is; can you afford NOT to own gold?

By converting as little as 5-10% of your assets into gold coins, you're strapping on a golden parachute against the coming freefall of financial confidence in the dollar. Start putting yourself on a personal gold standard now... before this quiet bull market roars at Main Street USA. -CRS & DMB

DISCLAIMER: All of the provided information is believed to be accurate, however errors are possible. The opinions in the Commentary section do not necessarily reflect the opinions of Swiss America. Past performance of any investment is no guarantee of future performance. All investments have risk.